Payments in advance

Purchases for future delivery or billed in advance are processes where two invoices are received from the vendor at different times:

  • NF-e to update the accounts payable and general ledger.

    Although the goods are still in the seller’s warehouse, they are owned by the purchaser.

  • NF-e highlighting the taxes to receive the goods from the vendor according to a delivery plan. The delivery plan is issued when the goods are available in the seller´s warehouse whether manufactured or purchased.

India specifics

When the vendor receives an advance payment from the customer, payment of GST is required on the amount received.

  • Vendor will issue a receipt voucher to the customer paying in advance for the supply of services. For the content of the receipt voucher
  • Vendor calculates GST on advance payment received.
    • Amount should be in gross, that is, inclusive of GST
    • If GST tax rate is not known at the time of advance payment, 18% tax rate is used
    • If place of supply is not known at the time of advance payment, it is considered interstate supply and IGST should be paid

How Infor meets the requirement

Proforma Invoice Concept has been introduced to request prepayment from a customer.

See Enabling payments in advance.